State of the industry

As consumers increasingly turn to mobile and video, publishers are faced with the biggest challenges yet around creating, distributing and monetizing content. We know—we’re a publisher, too.

To understand the changes at play, we talked to more than 300 premium publishers in the U.S., identifying the challenges and opportunities they see and how data and automation are empowering them.

Here’s what you need to know:

73%

of publishers increased their mobile inventory in the last year

Video is projected to be the #1 revenue driver this year

>90%

believe off-platform monetization is crucial

The Tech Tax continues to plague them

Meeting the Mobile & Video Demand

Consumers are in control when it comes to what they’ll watch, on which device and when. They demand more flexibility across platforms, expect more personalization in content and crave more inventive experiences. Publishers are hyper focused on meeting those demands on mobile and video, areas in which they anticipate to see the most growth in the next 12 months.

Globally, 35% more people watched mobile video in 2015 than 2014. Even higher in the US(50%), Canada(42%), and the UK(40%).9

On smartphones, users watch an equal number of short- and long-form videos in an hour (30% v. 29%); most videos watched on tablet are 20+ minutes long10

Distribution Revolution

Third-party publishing platforms like Facebook Instant Articles, Apple News and Google AMP still fuel the distribution debate among publishers. But what originally sparked panic seems to be paying off for many.

>90%

of publishers believe distributed media has had a positive effect; 53% deem it “extremely positive.”

A majority said syndication was essential to their strategy. Not a surprise, given that most publishers receive 25-50% of their traffic via syndication referrals.

Analyze, Optimize, Monetize, Repeat

The more things change, the more they don’t stay the same. As consumer behaviors evolve, buyer approaches change, the market shifts and, as a result, media inventory values fluctuate constantly, too. But in 2016, publishers have been more aggressive in bringing greater efficiency to their businesses. The key: Data.

Now more than ever it’s critical to invest in tools that:

Identify where consumers are coming from and which traffic sources are the most valuable

Layer intelligence on top of execution technology to improve real-time decision-making and ensure brand safety

Optimize constantly to assess buyer patterns and pricing so you can attract more valuable audiences

Analytics & Optimization

Publishers depend on a vast array of third-party services, the most common being data management, analytics and performance reporting. More than 66% cite the ability to access data holistically across platforms as very/extremely important.

50 million or more

20 million to less than 50 million

5 million to less than 20 million

Less than 5 million

Extremely important

46%

34%

16%

25%

Very important

50%

56%

47%

64%

Neither important nor unimportant

4%

6%

34%

6%

Not very important

0%

4%

2%

6%

Not at all important

0%

0%

1%

0%

While many publishers rely on a DMP, they do so for different reasons. Data security and cross-device management are the most common uses, followed by audience usage data to inform content and first- and third-party integration.

All this suggests that publishers realize they need to be just as data savvy as their advertisers. It also points to the costly gap between in-house and third-party capabilities.

Tech Tax Tyranny

Publishers are still prey to the tech tax—dollars lost to multiple intermediary vendors across the ad buying process.

>50%

rely on 5-10 ad tech vendors

>30%

rely on 11-16 vendors

<50%

of ad media spend goes to publishers11

Monetization

With the competition for consumers growing fiercer and ad blockers becoming more prevalent, publishers are increasingly evaluating alternative monetization strategies beyond advertising. More than 75% pursue subscription and ad supported business models. Of those focusing on subscriptions, more than 75% expect to expand their subscription options in the next 12 months.

Current Business Model

Both subscription and ad-supported

78%

Subscription only

9%

Ad-supported only

11%

We are not a content provider

2%

Primary Mobile Challenges for Publishers

We are expecting to expand subscription options

77%

We are expecting to have fewer subscription options

23%

We are expecting to eliminate our subscription offerings

0%

Most publishers have seen changes to their advertising models

71%

of their media sales are via programmatic, with a substantial shift to PMPs

56%

of publishers rely on a single PMP; just 28% use multiple partners

While PMP transactions have grown, there are still challenges, with tech deficiencies and management execution costs ranking the highest. The lowest ranked challenge? Lack of demand.

Simplify your monetization strategy

Header Bidding Is Here To Stay

Header bidding shows no signs of slowing down despite concerns about its longevity and latency.

About half of all publishers use header bidding technology

The majority use partner solutions

Of those, 75% use five or more partners

What’s Next?

While today’s media landscape makes it increasingly difficult for publishers to drive revenue, there are solutions. As you advance your content creation, distribution and monetization strategies in light of current trends, here are key issues to consider:

Are you and your partners focused on mobile video monetization?

How are you driving more holistic efficiency across display, mobile, video and TV?

How do you access unified intelligence, brand safety and measurement?

What mechanisms do you have in place to control and maximize inventory yield?

How are you minimizing the Tech Tax?

Ready for the right answers?Learn more about ONE by AOL for Publishers.